In the commodities space, Sugar has been under pressure year-to-date as well as for the period going back to October 2016. From a high of $23.90 in October 2016, we now trade at $12.30, a decline of 48%.
Well, you could access sugar via an ETF called the Teucrium Cane ETF which provides investors unleveraged direct exposure to sugar without the need for a futures account.
• Rising world population and growth of the middle class increases demand for sugar and sugar products, while decreasing the amount of arable land for sugarcane and other agricultural crop production.
• Developing countries account for 67% of global sugar consumption, and are expected to be the primary sources of future demand growth, particularly in Asia. Global consumption continues to expand, averaging 1.93% over the past decade, driven largely by rising incomes, population growth and shifting dietary patterns.
• In 2017/18 global sugar consumption is projected to remain at a near record high.
• Increasing domestic sugar demand in Brazil, the largest producer of sugarcane, largest exporter of sugarcane-based ethanol, and world’s fifth most populous nation, will affect Brazil’s sugar export capacity.
• Increasing domestic sugar demand in India, the world’s second largest producer of sugarcane and the world’s second most populous nation, is putting stress on India’s sugar export capacity.
• Sugar supplies are unpredictable – subject to changing global weather patterns that may cause flooding, drought and crop failures in major producing regions.
In addition to the above-mentioned factors, the technical setup signals an opportunity to take a buy/long position in anticipation of a bullish price reversal.
These are the motivating factors:
– Price reversing off swing support going back to August and September 2015
– RSI signaling bullish divergence and moving up from an oversold level
– Highest volume over the last two month since the ETF was launched in September 2011